Lonmin withdraws threat to fire strikers

By Tom Burgis

Updated 1408 GMT (2108 HKT) August 21, 2012

8 photos

Tension at South African mine – Miner Mfaseni Yekwayo, at a hospital near Rustenburg on August 18, relates to South African President Jacob Zuma, left, the events leading to the miners' clash with police.

Hide Caption

1 of 8

8 photos

Tension at South African mine – A woman mourns during a memorial service for the 44 people killed at Lonmin's Marikana mine on Thursday.

Hide Caption

2 of 8

8 photos

Tension at South African mine – About 600 workers stop working at the Royal Bafokeng Platinum Mine on Wednesday in Rustenburg.

Hide Caption

3 of 8

8 photos

Tension at South African mine – A private security guard mans the entrance to the Marikana platinum mine on August 21 where five days earlier police opened fire on striking workers. The violence left 34 dead.

Hide Caption

4 of 8

8 photos

Tension at South African mine – Miners arrive at the Marikana mine on August 21 after owners Lonmin gave striking workers until 0500 GMT to return to their jobs or face dismissal.

Hide Caption

5 of 8

8 photos

Tension at South African mine – Striking workers gather on August 20 at the Lonmin-owned platinum mine in Marikana, 10 days after 3,000 miners began an illegal strike over pay.

Hide Caption

6 of 8

8 photos

Tension at South African mine – Miners arrested for allegedly being involved in violent clashes between striking workers and police are escorted from the Ga-Rankuwa courthouse, Pretoria, on August 20.

Hide Caption

7 of 8

8 photos

Tension at South African mine – Mark Munroe (left), executive vice president for mining at Lonmin, sits alongside the company's chief financial officer Simon Scott during a press conference in Marikana on August 20.

Hide Caption

8 of 8

Story highlights

Lonmin ends threat to fire striking workers who failed to return to work by Tuesday

Clashes at its South African platinum mine this month have left 44 people dead

Unrest began as dispute over pay, complicated by union rivalries

Lonmin's shares shed 19% between initial clashes and close of trading on Monday

Lonmin has backed down on its threat to fire striking workers who failed to return to work by Tuesday after clashes at its South African platinum mine that left 44 people dead.

As a minority of miners began to return to their posts, the London-listed company dropped its ultimatum to workers as it struggled to cope with the political fallout from the violence and a halt in production that has prompted speculation it will need to raise fresh capital.

Mark Munroe, executive vice-president for mining at the world's third-biggest platinum producer, was quoted as telling local radio on Tuesday: "A deadline or ultimatum is not helping anyone. We strongly encourage people to come to work as soon as possible. There is a lot of action you can take before you dismiss someone."

In one of the bloodiest scenes since the end of apartheid nearly two decades ago, at least 34 people were killed and dozens more wounded when police opened fire on striking miners at Lonmin's Marikana mine last Thursday. Clashes the previous week near the mine cost the lives of 10 people, including two police officers.

The unrest began as a dispute over pay, complicated by union rivalries. Falling demand from carmakers that use the metal have led miners of platinum -- the world's most plentiful stocks of which lie under South Africa's northern plains -- to seek to cut costs.

Just Watched

Tension, disbelief cloud mine dispute

Just Watched

Mining conflict coming to a head

Jacob Zuma, South Africa's president, has ordered an inquiry into the violence and declared a week of national mourning after the outbreak of unrest in a sector that has long stirred political passions.

One in five of the 3,000 drill operators who staged the strike -- which has been declared illegal -- showed up for work on Tuesday, the company said, bringing overall attendance to 33 per cent of the mine's 28,000-strong workforce, slightly more than on Monday.

Lonmin's shares shed 19 per cent between the initial clashes and the close of trading on Monday. They climbed 2.4 per cent to £6.25 by late morning on Tuesday as analysts eyed a possible rights issue to counter the risk that the company would breach its debt conditions.

The company has yet to say how much production has been affected by the strike. Analysts at Deutsche Bank estimated the unrest would reduce Lonmin's output by 50,000 ounces -- equivalent to three weeks' production, or 7 per cent of the 721,000 ounces Lonmin sold last year.

Deutsche Bank said Lonmin's options to raise capital -- including closing high-cost shafts and a merger -- "are either difficult to achieve or fall short of solving the problem, making a rights issue more likely".